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Tuesday, 5 May 1936

Investigation of costs and prices of mowers reveals a somewhat similar position. In a previous table it was shown that in 1934 retail price of a 4^-ft. mower at Chicago, United States of America, is the equivalent of £19 18s. 9d. (Australian)' and at Toronto, Canada, £19 10s., compared with the Sunshine price of £31 4s. Following the line of reasoning adopted with binders, and confirming its conclusions by a comparison with' present export prices in the United States of America, the board is of the opinion that, under conditions of equal efficiency, Australian mowers should be sold to farmers at a price no greater than £22 10s.

It is of interest to note that the present retail price of a 44-ft. mower in the United States of America is $79.75, and that if an Australian farmer could purchase it f.o.b. New York at this price, the landed cost in Australia would be approximately as under: -

 

This includes duty calculated on the retail price, and yet a machine imported under such conditions would be landed at costs lower than the present retail price of £31 4s. for an Australian machine, and lower than the retail price of £37 charged by the International Harvester Company of Australia for an identical machine. lt is clear that the local manufacturers are using the whole of the existing protection (including exchange) on mowers, and that if the importing interests choose to make an attack, the existing Australian selling price could not bc maintained. In the light of these figures, the International Harvester Company's price for a mower also seems unreasonable, but. as pointed out previously, some lines must be sold on a wide margin to make up for losses or absence of profit on others.

As a final check, the following figures show that excess profits are not now being made, and that present prices are not unreasonably high : - In 1928, the capital employed by six principal manufacturers was £3,000,000; sales amounted to £2,000,000, and the profit was £210,000, representing an average return of 7 per cent. In 1932. the worst year of the depression, the capital employed was the same amount; sales amounted to £1,000,000, and there was a loss of £90,000. In 1933, the capital was reduced to £2,700,000, sales amounted to £1,600,000, and the profit to £6"0,000, represented, a return of 1.S5 per cent, on the capital employed.

These duties have been in force since the 29th March, 1935, and there has been no great outcry 'against them. I ask the committee not to weaken the position of Australia in its negotiations with the United States of America.

SenatorBROWN (Queensland) [9.311. - I desire to reply to some of the false economic arguments of the members of the Country party. We of the Labour party are just as anxious as they are that the farmers of this country should be treated fairly and be able to buy their machinery as cheaply as possible, but we do not believe that, merely by reducing the price of machinery, the problems now confronting the farmers will be solved. Members of the real Country party, led by Senator Johnston, as well as those belonging to the pseudo Country party, which has Senator Hardy as its leader, never seem to tire of telling the farmers of the great prosperity of the people residing in the cities of this country. It is time that propaganda was stopped. There may be isolated instances of profiteering, but even so, the problems of the farmers will not be solved merely by attacking the manufacturers. Even Senator Johnston admits that Australian workers are paid lower wages than the rates ruling in the United States of America, and, therefore, he must agree that the cost of labour is not the reason for the price of agricultural machinery being greater in Australia.


Senator E B Johnston - That is admitted by the Tariff Board.







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